Vanderbilt Law Student Wins 2013 Hastings Competition

Wyatt Sassman, a third-year student at Vanderbilt University Law School, has won first place in the TBA Environmental Law Section’s 2013 Jon E. Hastings Memorial Award Writing Competition. His article “Administrative Compliance Orders and Due Process after Sackett” looks at the 2012 U.S. Supreme Court decision in Sackett v. U.S. Environmental Protection Agency, which allowed an Idaho couple to challenge an EPA order requiring restoration of a wetland before the agency enforced the order with penalties. Sassman argues three points: that the court disregarded precedent and legislative history in finding for the Sacketts, that administrative orders do not violate due process rights, and that federal agencies should be free to use such orders without judicial interference. He will collect a cash award and his article will be published in an upcoming section newsletter.

When asked to speak on his originalist judicial philosophy, Justice Scalia quipped “It’s a pizzazzy topic: Constitutional Interpretation.”[1] The Justice recalled a television debate on the Court’s then-recent decision in Roper v. Simmons.[2] One pundit argued that the court got it right: people should not be subjected to the death penalty for crimes they committed while under the age of eighteen.[3] Another argued that the court got it wrong: a jury should have the option, given the right context, to subject people to capital punishment regardless of age.[4] The Justice responded, “It struck me how irrelevant it was, how much the point had been missed. The question wasn’t whether the call was right or wrong. The important question was who should make the call.”[5] To Justice Scalia, the question presented in Roper was not whether the application of the death penalty in this particular situation was right or wrong. The correct question, and what ultimately controlled Justice Scalia’s opinion in Roper, was whether the Constitution had delegated this decision to someone other than the judiciary. Scalia believed that it had, and that by focusing on the application of the law rather than the constitutional structure both the Roper majority and the television debaters had missed the whole point.

One must wonder if Justice Scalia feels the same about the public’s reaction to Sackett v. Environmental Protection Agency. That case questioned whether the Michael and Chantell Sackett could seek immediate judicial review of an Administrative Compliance Order (ACO) issued to them by the Environmental Protection Agency (EPA) under the authority of the Clean Water Act (CWA).[6] The Sacketts received this ACO while building a home in scenic Idaho, with a nice view of Priest Lake.[7] The ACO asserted that the Sackett’s lot is a wetland subject to the jurisdiction of the CWA, and that the Sacketts had violated the Act when they filled in their wetland without a permit.[8] The ACO required the Sacketts to return their parcel to its original condition (a costly demand given their construction work) and threatened further civil or administrative penalties if the Sackett’s failed to comply with the order.[9] Stalwart, the Sacketts requested a hearing before the Agency to argue that their land is not a wetland.[10] The Agency denied their request for a hearing.[11]

With the help of a property rights advocacy group, the Sacketts filed suit in the United States District Court for the District of Idaho.[12] The Sacketts again argued that their property is not a wetland subject to the CWA, but now they also argued that CWA ACOs are an unconstitutional deprivation of due process rights.[13] The court dismissed the action, agreeing with “every published district court decision on this same issue” that the court lacked jurisdiction to assess an ACO issued under the CWA prior to EPA initiating its own enforcement action—in other words, ACOs were immune to pre-enforcement judicial review.[14] Stalwart, the Sacketts appealed the decision but lost yet again.[15] An issue of first impression before the Ninth Circuit, the court addressed the constitutional claims in depth but was nevertheless persuaded by the “uniformity of consensus on this issue”—that ACOs were neither reviewable prior to enforcement nor a violation of due process rights.[16]

The Sacketts’ plight grew in popularity. Their case became a “cause celebre for the right, which [was] depicting the EPA as an out of control agency.”[17] The couple appeared on Lou Dobbs’ television program three times in 2011, and testified before Congress in October of 2012 regarding the “government’s assault on private property.”[18] Journalists wondered if the Sacketts “might get a friendlier reception from the Supreme Court,” given that “Justice Antonin Scalia once complained that the EPA has used its authority over wetlands to claim control over an ‘immense’ area of the nation.”[19] Bloggers argued that “private citizens should not be forced into bankruptcy as the penalty for pursuing the American Dream.”[20]

The Sacketts appealed to the Supreme Court. The government urged the Court to deny certiorari, “noting that every federal Circuit Court to face the issue had ruled against allowing pre-enforcement lawsuits, limiting enforcement to cases in which EPA chose to sue.”[21] The Court nevertheless accepted the case and issued its decision on March 22, 2012. The Court held that the Sacketts could challenge the EPA’s jurisdiction over their land through pre-enforcement judicial review of the ACO.[22] The Court’s decision was unanimous, with Justice Ginsburg and Justice Alito writing separate concurrences.[23]

The Court intended its decision to be a limited one. As Justice Ginsburg noted in her concurrence, the Court only held that “the Sacketts may immediately litigate their jurisdictional challenge in federal court,” and that other concerns such as the content and constitutionality of the ACO are questions that the opinion “does not reach out to resolve.”[24] One law professor opined that “the Sackett decision is not based on any particular notion of property rights [and, in fact, it] hardly mentions property rights.”[25] But such restraint was limited to the campus, or soon forgotten:

Last month, the Supreme Court righteously defended due process and private property when they unanimously ruled against the egregious regulatory abuses of The Government in Sackett v. EPA. It was a definitive victory for the freedom of the individual over the whims of a power-tripping bureaucracy, and we should take it as such.[26]

To be fair, observers are merely that. But one must wonder, did the public really miss the point?

The Supreme Court did more than give the Sacketts their fair day in court when they reversed the judgment of nearly every federal court that had addressed the reviewability of ACOs under the CWA—the Court stuck a wrench in a much larger enforcement scheme. ACOs are one of EPAs most utilized enforcement tools. Most of the nation’s major environmental laws authorize EPA to issue ACOs. Three of these laws, the Clean Air Act (CAA), the Resource Conservation and Recovery Act (RCRA), and the Safe Drinking Water Act (SDWA) contain ACO schemes nearly identical to the CWA. Importantly, none of these statutes include an explicit prohibition on pre-enforcement review of ACOs—courts had implied a prohibition from the legislative history and statutory structure of these laws. In Sackett the Court discounted the legislative history and statutory design of the CWA that convinced all other federal courts of Congress’ intent to prohibit pre-enforcement review of ACOs. It is only by diminishing Congress’ intent that the Court subjected the ACO scheme to judicial review under the Administrative Procedure Act (APA). Observers applying Sackett to the other statutes expect that their ACO schemes will suffer the same fate.

One ACO scheme, however, seems to survive the reasoning in Sackett. The Comprehensive Environmental Response, Cleanup, and Liability Act (CERCLA) explicitly prohibits pre-enforcement judicial review of ACOs. When faced with the explicit rather than implicit intent of Congress, Sackett’s reasoning will not apply. CERLCA ACOs will likely stand as the only ACO scheme insulated from pre-enforcement review after Sackett.

As such, CERCLA invites the due process question. The Due Process Clause of the Constitution requires “that some form of hearing is required before an individual is finally deprived of a property interest.”[27] If pre-enforcement judicial review is that hearing in a post-Sackett world, does CERCLA violate the Constitution by denying that hearing to a litigant who can articulate a property interest?

The Court has declined to hear a direct due process challenge to ACOs,[28] and avoided the issue in Sackett. Instead, the Sackett Court focused on a regulated party’s ability to challenge EPA’s asserted jurisdiction—whether the EPA was right or wrong when it issued a particular ACO. But this Essay argues that important question in Sackett is not whether the call was right or wrong, but who should make the call.

When the Court opened ACOs to pre-enforcement review, the Court removed the structural element that distinguishes ACOs as a separate enforcement tool. Congress, however, intended ACOs to be a separate enforcement tool from judicial enforcement. Legislative history shows that Congress made the decision to delay judicial review of ACOs in order to give the Agency a tool that was quicker and more flexible than the judicial and administrative enforcement tools already available to it. In essence, Congress made a decision to empower administrative efficiency at the expense of immediate judicial review. Congress’ ability to make this choice implicates the very nature of administrative agencies in our constitutional structure, and these constitutional concerns have long motivated courts to defer to an agency’s ability to enforce its laws as delegated by Congress.

These same constitutional concerns control the enforcement of due process rights by our courts. When courts address a procedural due process issue they weigh the significance of the private interest at risk of deprivation without a hearing against the government’s interest in avoiding judicial interference with its desired program. By articulating the constitutional implications of Congress’ ability to empower its executive agencies, this Essay argues that the government’s interest in avoiding judicial interference with the ACO scheme is strong. So strong that it will outweigh any private property interest articulated by a regulated party who receives an ACO. As such, ACOs insulated from pre-enforcement review do not violate the Due Process Clause of the Constitution. The Sackett Court worried that EPA was making the wrong decisions when it issued ACOs. As a result, the Court ignored congressional intent to find that ACOs are subject to immediate rather than delayed judicial review. But Sackett focused on the wrong question. The important question is whether a court should make this call. This Essay argues that a court should not.

I.

The Basics - ACOs are a complementary enforcement tool used alongside traditional judicial and administrative enforcement in environmental law. They are utilized in the nation’s most pervasive environmental policies, and in nearly every medium.[29] Most commonly, ACOs are one of three civil enforcement options available to the EPA: direct judicial enforcement, administrative adjudication subject to judicial review, or an ACO.[30] Because they offer unique speed, structure, and flexibility, ACOs have become the EPA’s most commonly used enforcement tool.[31]

Generally, ACO schemes share a similar structure because they share a common theme: the expansion EPA’s administrative authority in response to the shortcomings and burdens of traditional judicial and administrative enforcement tools. The ACO addressed to the Sacketts can trace its lineage to 1972, when the modern CWA took shape in response to EPA’s failure to effectively administer the nation’s water laws.[32] Prior to 1972, enforcement of the nation’s water pollution laws was anywhere from “spotty” and “slow and awkward” to “ineffectual” and stricken by “an almost total lack of enforcement.”[33] In 1971, Senator Muskie led a charge to mandate tougher enforcement of water pollution laws.[34] His original bill introduced section 309(a)(3), requiring the Administrator to issue a compliance order upon finding a violation of the Act.[35] Section 309(b) further required the Administrator to initiate a civil action whenever a compliance order was violated.[36] The Senate drafting committee explicitly noted that these sections sought to remedy the weak enforcement procedures available to the federal government under prior water laws.[37]

The introduction of ACOs into the CAA follows a more modern but similar story. Prior to the 1990 Amendments to the CAA, the only administrative order authority available to EPA under the Act was section 120.[38] Section 120’s inability to adequately address ongoing violations led EPA to funnel its enforcement to civil litigation, where the government could at least seek injunctions to stop violations.[39] Yet the slow pace and high costs of civil litigation frustrated both agencies’ goals, decreasing overall enforcement.[40] Congress again turned to ACOs for a solution, importing ACO authority into the 1990 Amendments to the CAA.[41]

It is this theme that ultimately led most courts to hold, despite each statute’s silence on the issue, that ACOs are not reviewable prior to judicial enforcement initiated by the Agency.[42] Otherwise, ACOs would hardly be an alternative to immediate judicial enforcement. CERCLA is the exception, being the only ACO scheme to explicitly prohibit judicial review of ACOs prior to Agency enforcement.[43] Thus, CERCLA remains even in light of Sackett and tees up the due process issue.[44]

II.

Procedural due process analysis under Mathews v. Eldridge remains a useful way of assessing whether the ACO schemes violate the Due Process Clause of the Constitution.[45]Mathews asks a court to weigh a party’s private interest in property or liberty against the government’s administrative and institutional interests in maintaining its desired scheme.[46] The early motions of the Mathews analysis are of less interest to this essay. It is safe to assume that a private party issued an ACO will be able to articulate a protected property interest,[47] and courts have already identified that the fiscal and administrative burden of offering a hearing for every ACO issued would be substantial.[48]

But the Mathews Court cautioned that “more is implicated in [procedural due process cases] than ad hoc weighing of fiscal and administrative burdens against the interests of a particular category of claimants.”[49] Courts must also consider the government’s interest in preserving the proper balance of judicial review over executive action.[50] This institutional interest is arguably the more important of the two elements; the Court explained that the “ultimate balance” of the procedural due process question “involves a determination as to when, under our constitutional system, judicial-type procedures must be imposed upon administrative action to assure fairness.”[51]

Constitutional and Administrative Law: Agency Legitimacy and Expertise - Administrative agencies have long been described as constitutional oddities. As Jerry Mashaw put it “there is a hole in the U.S. Constitution,” for our founding document “provided for a legislature, a Supreme Court, and two executive offices” but “[a]dministration was missing.”[52] Administrative law bridges this gap, never fully divorced from separation of powers and other constitutional doctrines. As the Supreme Court has noted, some of the most foundational elements of judicial review over agency action “stem from the administrative agency’s unique constitutional position”—although in the Court’s eyes this constitutional position is “delicate, subtle, and complex.”[53]

Law professors are less intimidated. Surveying the earliest Federalist administrations, an era which he describes as “in some sense a continuation of the Constitutional Convention,” Mashaw identifies that “[t]he task of administrative law is to generate institutional designs that appropriately balance the simultaneous demands of political responsiveness, efficient administration, and respect for legal rights.”[54] For the administrative state is ultimately a pragmatic, ad hoc solution to the hole in the Constitution, and it is somewhere triangulated between these three administrative goals that an agency appropriately fills the hole and operates at the peak of its constitutional legitimacy.

These tripartite goals frame modern administrative law scholarship on agency legitimacy. The demand that agencies remain politically accountable has manifested both the interest group model and the presidential control model of legitimizing agency action.[55] Other scholars argue that controlling arbitrary action and respecting legal rights is the key to administrative legitimacy under our constitutional structure.[56] Mashaw argues that the earliest administrative goal was “[e]nergy and effectiveness in administration,” a goal that “contemporary administrative law’s concentration on control and accountability all but obscures.”[57] Efficient administration is an important and pragmatic goal, since it determines the modern nation’s “capacity to carry through on the multitude of common projects that the modern administrative state has launched or to manage emerging threats and grasp emerging opportunities.”[58]

Agency expertise is an essential element of an agency’s efficiency in administration, and thus a keystone element of an agency’s legitimacy.[59] Expertise is one of the primary reasons why agencies are delegated the authority to administer the law in the first place, with the expectation that expert administrators will create more effective policy than a generalist Congress.[60] Expertise is also a key reason for judicial deference to agency decisions, partly out of explicit respect for the constitutional role carved out for administrative agencies.[61] Thus, expertise and efficiency in regulation is best understood as an equal among the other administrative goals of political accountability and avoiding arbitrariness—each a continuing and important element in legitimizing agency actions in our constitutional structure.[62]

Connecting Agency Expertise and Agency Enforcement Discretion- An agency is an expert at enforcing its laws. Because the agency is applying the very rules and regulations it generated through its policy expertise, the agency is in a uniquely qualified position to make decisions regarding the efficient enforcement of those laws.

The Supreme Court recognized the relationship between enforcement and expertise in Heckler v. Chaney.[63]Chaney found that the FDA’s decision not to pursue an enforcement action was not reviewable by a court under the APA.[64] Importantly, the Court identified the connection between an agency’s enforcement decisions, its expertise, and its proper role in administrative law. Chief Justice Rehnquist’s reasoning is worth quoting at length:

[T]he agency must not only assess whether a violation has occurred, but whether agency resources are best spent on this violation or another, whether the agency is likely to succeed if it acts, whether the particular enforcement action requested best fits the agency's overall policies, and, indeed, whether the agency has enough resources to undertake the action at all. An agency generally cannot act against each technical violation of the statute it is charged with enforcing. The agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities. Similar concerns animate the principles of administrative law that courts generally will defer to an agency's construction of the statute it is charged with implementing, and to the procedures it adopts for implementing that statute.[65]

Chaney’s reasoning however does not command courts to withhold review of all agency enforcement decisions.[66] But Chaney does suggest that an agency’s enforcement decisions deserve judicial deference when reviewed. The source of this deference remains the agency’s particular expertise in enforcing its laws. This expertise sounds in the “administrative principles” referenced by the Chaney court—a constitutional backdrop encouraging judicial recognition of an agency’s efficient administration of the law.

Connecting the ACO Structure to Agency Enforcement Discretion - The ability to utilize an ACO is an enforcement policy choice within the realm of the agency’s expertise that deserves judicial deference. When Congress empowered the EPA to issue ACOs, it intended to give the Agency an enforcement option that was decidedly quicker and more flexible than traditional judicial enforcement or administrative adjudication.[67] Key to this scheme is that the Agency controls the timing of judicial review; the ACO thus encourages voluntary compliance and cooperation with the Agency in a forum outside of judicial review.[68] Judicial review is nevertheless required for enforcement of the ACO, but triggered at the Agency’s desire rather than the regulated party’s.[69] By removing the Agency’s control over the timing of judicial review, the ACO looses its identity as a separate enforcement choice—it becomes no more than a warning letter, holding no leverage to encourage compliance outside of a judicial forum and serving the same function as warnings already issued by the Agency under separate authority.[70]

A court should use appropriate deference when interfering with the Agency’s ability to choose among its statutory enforcement options. The EPA’s ability to choose an ACO over immediate judicial enforcement or administrative adjudication empowers the Agency’s enforcement expertise.[71] Indeed, Congress empowered EPA to issue ACOs precisely because the Agency could not “act against each technical violation of the statute it is charged with enforcing” using its traditional enforcement tools.[72]Mathews analysis compels a court to respect Congress’s role here and find that ACOs do not violate due process.

III.

Admittedly, this Article’s due process analysis exerts significant pressure on the reasoning of Sackett by relying on the legislative history and structure of the ACO statutes to illustrate congressional intent. The Sackett court explicitly held that “there is no suggestion that Congress has sought to exclude” CWA ACOs from the APA’s presumption of judicial review.[73] This Article’s due process argument is premised on the fact that Congress has expressed clear intent to preclude ACOs from pre-enforcement judicial review in an effort to empower agency enforcement, particularly in CERCLA but also in other statutes like the CWA and the CAA.

But frankly, Sackett should be subjected to this pressure. The decision departed from the reasoning of nearly every federal court without adequate explanation. In the words of the Sacketts’ attorney, “[h]ow can it be that so many courts got it wrong, and why did the Supreme Court let the error persist for so long?”[74] Writing from his experience, the Sacketts’ attorney suggested that the Supreme Court is simply more hostile to environmental regulation than lower courts, or that his clients were supremely sympathetic.[75] But these explanations are troublesome because they fail to explain why the traditionally liberal members of the Court—Justices who are often considered more receptive to environmental enforcement and regulation of private property—signed onto the decision. The unanimity of the decision is even more poignant considering that its reasoning palpably avoids legislative history and is authored by Justice Scalia, whose “protracted battle against reliance on legislative history” has often put him at odds with traditionally more liberal sitting Justices.[76]

Constitutional avoidance provides a more persuasive narrative for the liberal Justices’ participation in the Sackett opinion. The due process question is more difficult for the Agency to win and poses a greater risk to EPA enforcement authority than the Court’s more narrow ruling under the APA.[77] Adopting the due process argument outlined in this Essay and grounding ACOs in their proper constitutional authority will help repair their role in environmental law. Limiting the influence of Sackett is but the first step in realigning ACO law with federal precedent, congressional intent, the constitutional foundations of administrative law, and the nation’s commitment to protect our environment.

[25]See also William Funk, “Rule of Law Prevails in Sackett v. EPA” RegBlog (March 25, 2012) https://www.law.upenn.edu/blogs/regblog/2012/03/rule-of-law-prevails-in-... (“Property rights advocates are trumpeting a victory. Yet that’s quite an overstatement because the Sackett decision is not based on any particular notion of property rights. The Court’s opinion hardly mentions property rights.”)

[45]See Mathews v. Eldridge, 424 U.S. 319, 333 (1976). But see, e.g., Edward L. Rubin, Due Process and the Administrative State, 72 Cal. L. Rev. 1044, 1137 (1984) (Mathews’ “premises are debatable; its methodologies are impractical; and each of its three factors is of questionable relevance.”) Professor Rubin critiqued Mathews’ ability to determine minimum and specific procedures required by due process—and to this extent, Mathews is indeed of little help. But this Article requires a different result from Mathews; it askscourts to internalize constitutional foundations for judicial deference to administrative decisions through Mathews’procedural due process analysis. Mathews’ language permits, if not requires, this internalization—and at minimum, Mathews is a useful analytical tool for this purpose.

[47] For example, parties could assert an interesteither their ability to use their land insofar that the party believes its use complies with environmental laws, or a protected interest in the cost of compliance activities necessary to avoid further agency enforcement. Scholars too have identified other potential protected interests. For example, Professor Jonathan Adler suggests that ACOs could implicate protected interests by merely imposing any legal obligations, or by infringing upon a persons right to exclude others from property. Jonathan Adler, Cato Supreme Court Review, 157-58 forthcoming, Wetlands, Property Rights, and the Due Process Deficit in Environmental Law.

[48]See General Electric I, 595 F. Supp. 2d at 33.Courts note that EPA issues a surprisingly large number of ACOs, many of which would likely be challenged if the opportunity was available. Id. For example, in one year over 80% of EPA’s enforcement actions were ACOs; the Agency issued 3,228 administrative orders compared to 478 civil and criminal judicial cases. See Joel A. Mintz, Sackett v. EPA and Judicial Interpretations of Environmental Statutes: What Role for NEPA?, 42 Evnt’l L. 1027, 1029 (2012). Indeed, courts recognize that ACOs leverage these “high stakes and complex technical judgments, [and that] any hearing before a neutral decision-maker would involve significant fiscal and administrative burdens.” Id.

[55]See Lisa S. Bressman, Beyond Accountability: Arbitrariness and Legitimacy in the Administrative State, 78 N.Y.U. L. Rev. 461, 475-91 (describing the shift from the interest group model to the presidential control model, noting the simultaneous rise in the “majoritarian paradigm,” or the importance of presidential control over the executive to constitutional theory as an effort to keep the executive politically accountable). See also Elana Kagan, Presidential Administration, 114 Harv. L. Rev. 2245, 2254 (2001) (articulating the presidential control model).

[59]See, e.g., Emily H. Meazell, Presidential Control, Expertise, and the Deference Dilemma, 61 Duke L. J. 1763, 1771 (2012) (“Since the dawn of the modern administrative state, expertise has played an important role as an anchor of regulatory legitimacy that has shaped the relationship between courts and agencies.”)

[70]Id.See alsoSackett III, 132 S.Ct. at 1373 (noting that ACO’s subject to judicial review will merely act as notices of potential violation, and that “The [CWA] does not guarantee the EPA that issuing a compliance order will always be the most effective choice.”); Sackett III transcript (discussing EPA’s authority to issue warning letters separate from their authority to issue ACOs).

[77] Courts accord less deference to an agency’s expertise when assessing constitutional challenges to agency action.SeeJ.J. Cassone Bakery, Inc. v. N.L.R.B., 554 F.3d 1041, 1044 (D.C. Cir. 2009) (“‘[A] reviewing court owes no deference to the agency's pronouncement on a constitutional question.’ In other words, we entertain [plaintiff’s] due process claim de novo.”) (quotingLead Indus. Ass'n v. EPA, 647 F.2d 1130, 1173-74 (D.C.Cir.1980)); Porter v. Califano, 592 F.2d 770, 780-81 (5th Cir. 1979)(“The intent of Congress in [defining the scope of review over agency action] was that courts should make an independent assessment of a citizen's claim of constitutional right when reviewing agency decision-making,” even when the agency acts within its expertise). Constitutional challenges encourage the Court to engage the particular facts of the case—dangerous if the Sacketts were as sympathetic as their attorney suggests. See Porter, 592 F.2d at 781 (“As the Supreme Court noted . . . “(t)his Court has regularly held that where constitutional rights are in issue an independent examination of the record will be made in order that the controlling legal principles may be applied to the actual facts of the case.”) (quotingPickering v. Board of Education, 391 U.S. 563, 578 n.2 (1968)).